sgbolt

Hi all
Just wondering if anyone had any words of wisdom. I have a house in UK that i let and hoped I could invest the proceeds rather than let it sit in my UK bank account. I know i can transfer over here but before i do that, i was thought i would ask to see if that was my best option. Thanks

JamesM

The challenge with investing it in the UK is I don't think your allowed to use an ISA because you are resident of Canada.

That would make it hard for you to invest and have any tax breaks unless of course you can keep quiet about it.

sgbolt

yes i see - silly rules as i would obviously declare any profits. Thanks

Siouxie

Keep in mind the requirement to declare any worldwide assets valued (combined) of $100,000 or more for tax purposes - that includes property owned abroad or the cash from a sale, failure to do so can result in huge penalties/fines and interest. (not forgetting potential CGT - hope you got it valued before you became a tax resident of Canada.. https://britishexpats.com/wiki/Tax_a...a#Canadian_Tax )
Canada also requires you to declare any income earned worldwide.. that would include rental income.

glendem4

Any rental income earned will need to be declared in your country of residence. Only option to shield from the tax man is to fund a RRSP. 18% of income can be sheltered up to a maximum of around $27k

Mordko

See no advantage in doing that rather than just transferring the money to Canada and investing here:

1. You may find it hard setting up a brokerage account in the UK. They prefer to cater to UK residents.
2. Brokerage fees are higher in the UK.
3. As others have mentioned, you won’t be able to use tax-sheltered investment vehicles. In Canada, assuming you have room, you can use either TFSA or RRSP.
4. If you don’t have any room in tax-sheltered accounts, filling in tax forms would be a bit simpler if you invest in Canada.
5. Arguably there are better options and more choice for investing in Canada, particularly if you use ETFs.

Tumbling_Dice

Barring keeping a float for repairs, months of no rent etc. I would agree it is better to invest where you are tax resident. Only thing to keep an eye on is exchange rates, although there isn't much one can do to mitigate that.

As general points of interest, and not to come across as social media argumentative, your 2nd and 5th points are assertions I never thought I would see anyone make.

It seems to me that your 2nd point is way too simplistic, although negated by the first. Surely the fees, if you are trading on your own account, will depend on what services you want, how much you are investing and what your trade turnover is like. Unless things have drastically changed in the last 5 years, this is one the OP should do more research on. If, however, the OP is investing in the likes of mutual funds / OEICS / Unit Trusts, this is just plain wrong, even with the newer unbundled MF classes. Canadian fees are many times higher than in the UK. Again, OP should do the research for themselves.

On your 5th point, I would love to know how you argue the Canadian market has "better options and more choice" than the much larger and more sophisticated UK market.

Mordko

There are several types of fees, eg

1. Annual/quarterly Account service charges.
2. Product costs (MER/TER) which are unrelated to the brokerage
3. Trading costs
4. Withdrawal costs
etc

One can always find a really expensive option in any country. Lets assume that’s not what we are after.
My experience is based on having every imaginable type of account in Canada (RRSPs, TFSAs, non-reg). UK experience is mostly dated but more recently we searched for a new broker for a SIPP.

What I found is that:

1. Canadian brokers do not have generic service charges if you have more than a nominal amount, typically 1-25k. Can be more or less; or you are required to execute a few trades. UK brokers which offer decent selections of products typically charge more than 0.1% of the total value. In Canada my total costs, including transaction and MER product charges are less than 0.1%.

2. Mutual funds are expensive in both countries. US is ahead of us in this respect. To cut the costs in Canada or UK you need to use ETFs. Annual costs of owning a locally traded ETF are comparable in the UK and Canada. The choice is better in Canada. Trading costs are higher in Britain. Several Canadian brokers let you buy ETFs for free.


3. UK brokers do not allow you to buy US traded products (eg ETFs traded on NYSE). Canada does. US traded funds are far more diverse and cheaper than what either Canada or UK can offer.

4. I can move money out of Canadian broker accounts into a local bank account for free. Can’t fo that in the UK.

So, you are right - it all depends on specific products, but if you are trying to minimize costs, Canadian brokers win - at least in my experience.


Here are UK brokers: https://monevator.com/compare-uk-che...nline-brokers/

Here is a review of several Canadian brokers: https://www.moneysense.ca/save/inves...ers-in-canada/